A recent report in the Harvard Business Review identified some noteworthy considerations in the area of “Green Technology.” Until recently, the concept of a green business strategy evoked visions of fringe environmentalism and a high cost for minimal good. But now there is clear evidence of a large shift in perception: an awakening of social consciousness combined with a realization that a strategy good for the world can also be good for your bottom line. To this end, a proliferation of Green Business and Green Technology texts have flooded the business book market, most geared toward providing evidence and advice for why businesses should and must put a socially responsible strategy at the top of their CEO’s agenda.
According to the HBR report, in 2009 venture capitalists invested $ 4.9 billion into the green technology sector. Adding to that, infusions of government stimuli and the considerable tax credits enjoyed by firms developing green technologies, it’s no wonder the cries of a “green bubble” have grown louder.
The latest research findings serve to abet the bubble prophecy, citing huge amounts of money being poured into bold new R&D programs. However, these efforts and funds are mostly lost. The HBR article makes the point that, as in any other areas of radical innovation, one can expect about 90% of all green innovation attempts to fail; and of course with those failures, most of the invested dollars will be gone.
Current research supports a different approach that would allow businesses to reap opportunity at much lower cost. The article states: “studies of several hundred technological innovations tell us that we can benefit hugely if we stop equating innovation with new R&D effort, and instead revisit the buried potential of already existing technologies.”
Thus, when applied to the new green opportunity space, fallow technologies could yield considerable payoffs at very low cost. HBR cited the example of Universal Remediation Inc.’s PRP powder being used to deal with the recent BP oil spill disaster in the Gulf. The product delivery system made use of the company’s microencapsulation technology originally developed by a consortium of firms working with NASA. In the oil spill application, the beeswax nanospheres were able to absorb the oil, up to 20 times their weight, remain impervious to water, and attract natural organisms to eat both the beeswax and the oil, dying off after consumption. Herewith, an example of existing technology redirected and applied to great effect.
In a decade long study, researchers found that enterprises would rather pursue new technological development than explore whether existing technologies can be applied to new opportunities, like the green space. In no small part this is due to the fact that many firms are heavily vested in technical R&D capabilities and relatively underinvested, or not invested at all, in capabilities to systematically identify further market opportunities for their existing technologies.
The irony is notable: businesses have deep experience with their existing technologies, so leveraging existing technology into a new domain is typically much less expensive than the development of entirely new technology.
The research suggests a number of interesting new challenges for building green opportunity portfolios, starting with the way teams are assembled to identify new opportunities. Typically, employees assigned to work on technology market identification — marketing and/or technology specialists — underperform when compared with teams augmented with other players, like generalists (experienced entrepreneurs) and upstream partners (potential suppliers), who can yield important downstream commercialization insights.
Before launching an all-out R&D effort to attack new terrain, like the green space, enterprises should consider directing their people to think about places where the firm’s existing technologies could be implemented to provide green solutions. This may prove a much faster and significantly more cost-effective approach.
LTI has for many years provided new and also well proven technology to provide for clients’ computer infrastructure operation, upgrade and development. The majority of these clients are world leaders in providing first class products and services. LTI’s expert computer management leadership is able to provide solutions for improving the productivity and efficiency of new or current systems by leveraging well established and proven technology. LTI is already involved in evolving technologies supporting such green initiatives as “smart grid” and high performance computing with well proven approaches that do not require expensive R&D.